Industry insider AP Abacus, citing sources from several Ethereum spot ETF issuers, claims that two more rounds of S-1 document revisions may be required, with the approval date likely to fall in late July. As the potential approval time draws closer, traders have begun to place bets on the price trend of Ethereum ETFs following approval.
Analysts at cryptocurrency research firm K33 Research believe that the Ethereum ETF will be a significant driving force for the price of Ethereum, predicting that Ethereum’s performance will surpass Bitcoin’s in the weeks following the ETF’s listing in the United States.
According to a report by Cointelegraph, K33 analysts Vetle Lunde and David Zimmerman state in their latest report that Ethereum will “immediately drop” after the launch of the ETF, but as with Bitcoin, the price of Ethereum will rise with the influx of new funds.
On the other hand, $8.5 billion worth of Bitcoin will begin to be returned to creditors of the now-defunct exchange Mt. Gox this week, and with the German and US governments continuously selling confiscated Bitcoin, the price of Bitcoin will be under pressure. Therefore, Ethereum has the opportunity to outperform Bitcoin during this period.
“With the arrival of summer and the accumulation of funds, the ETF is a strong catalyst for ETH’s relative strength. I firmly believe that the current ETH/BTC price is cheap for patient traders… We maintain a bullish outlook on ETH and expect net inflows to reach 0.75-1% of ETH’s circulating supply within 5 months after launch.”
Furthermore, Vetle Lunde and David Zimmerman note that the open interest in Ethereum futures contracts surged significantly after the SEC approved the 19b-4 document for the Ethereum ETF in May, indicating that many traders are using substantial leverage to bet on the potential price trend of ETH before the launch of the ETF.
However, another interpretation in the market is that the approval of the Ethereum ETF provides traders and hedge funds with arbitrage opportunities, hence a large number of institutions are using the negative premium of the Grayscale Ethereum Trust (ETHE) relative to the market price of Ethereum for hedging arbitrage.
